Financing a Property Mortgage Interest Development

Mortgage Interest Development

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Source: Credit Suisse, Datastream. Last data point: 03.07.2017

Interest Rates for Fix Mortgages with a Long Term Likely to Remain Volatile

The Swiss economy is currently growing at a subdued rate. Growth is gaining momentum, however, and is increasingly broad-based. For 2017 as a whole, we expect economic growth of 1.5%. Downside risks nevertheless persist, with growth heavily dependent on the future direction of the Swiss franc and the European economic situation. The rate of inflation has recently risen back above zero, although at an expected 0.5% for 2017 it remains at a low level. The Swiss National Bank (SNB) can therefore continue putting the development of the Swiss franc at the forefront of its monetary policy. The SNB is likely to leave its target band for key interest rates unchanged at between –1.25% and –0.25% over the coming 12 months. We therefore expect interest rates for Flex rollover mortgages to remain at their current lows over the next 12 months. A sideways movement is likewise anticipated in the case of mortgages with a short and medium term. On the other hand, interest rates for Fix mortgages with a long term are likely to rise slightly, by 30 to 35 basis points, over the coming 12 months. As in recent weeks, however, upward and downward spikes must once again be expected for all maturities.

  Interest rate
Forecasts for
  03.07.2017 3 mths 6 mths 12 mths
Flex rollover mortgage1
0.99% 0.99% 0.99% 0.99%
Fix mortgage (3 years)2
1.11% 1.10% 1.10% 1.10%
Fix mortgage (5 years)2
1.23% 1.25% 1.25% 1.25%
Fix mortgage (10 years)2
1.69% 1.75% 1.85% 2.00%
Fix mortgage (15 years)2
2.10% 2.20% 2.30% 2.40%

The interest rates listed are indicative values and apply to top-quality residential property and borrowers with impeccable creditworthiness.

1 Flex rollover mortgage (framework term three years). Interest rate based on three-month CHF LIBOR. Interest rate adjusted every three months.
2 Fix mortgages. Fixed term and interest rate for the entire term.